Fleet News

'Stockpiling prevents residuals from plummeting'

FLEETS are being protected from plummeting residual values by manufacturers which stockpile their used car stock and the fleet industry should welcome it as a normal business practice, according Graham Johnstone, founder of fleet and finance remarketing specialist Cars Direct.

Johnstone has sprung to the defence of car manufacturers after a recent investigation by BBC1's Panorama programme accused them of unfair practices, including price fixing and showed airfields full of nearly-new cars to back up its argument. Manufacturers denied the charge and Johnstone has slammed the investigation as unfair and misleading.

He said: 'In the case of fleets, it makes commercial sense to rationalise the release of vehicles into the market place rather than to depress demand through wholesale and unregulated dumping. Stockpiling in large numbers - with all the attendant costs in movement and storage - has more to do with poor planning by manufacturers than an attempt to protect new car prices. When a huge amount of vehicles is released from daily rental companies, the manufacturers have a choice: do they pay the penalty of storage or allow the cars to flood the market? But putting so many vehicles our for sale would affect everyone's confidence. They are protecting customers by stockpiling.'

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